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Brussels - British Prime Minister David Cameron urged his European counterparts at a Brussels summit on Thursday to reach a "credible" deal to keep his country from crashing out of the EU and settle the issue for a generation.

Cameron wants a deal on reforms to the 28-nation bloc before holding a referendum as early as June but France and other member states warned that they would not agree to a deal at any price.

"It's an opportunity to move to a fundamentally different approach to our relationship with the EU - what some might call a sort of live and let live," Cameron told fellow leaders at the first working session of the summit.

He urged them to secure "a package that is credible with the British people", adding that the issue of Britain's place in Europe "has been allowed to fester for too long" and that there was now a chance "to settle this issue for a generation".

Three years after Cameron announced he wanted to reset Britain's ties with the European Union, talks are going down to the wire on his demands on four key areas.

The British premier wants welfare benefit restrictions to help curb immigration, safeguards for non-euro countries like Britain, increased EU competitiveness and an opt-out from closer EU integration.

France veto warning

French President Francois Hollande said agreement with Britain was "possible" and that was what he wanted - but raised fresh doubts over the protections for non-eurozone countries.

"No country can have the right to veto, we cannot hold Europe back from advancing," he said.

Cameron won crucial backing Wednesday from German Chancellor Angela Merkel who said Berlin had shared his concerns "for many years".

Arriving for the summit, Merkel said there were still some issues to resolve but she was "happy to do everything to create the conditions for Britain to remain part of the European Union", she said.

For her part, straight-talking Lithuanian President Dalia Grybauskaite punctured some of the summit rhetoric.

"I think everyone will have their own little drama and then we will agree," she said.

European Commission chief Jean-Claude Juncker said he was "quite confident" of a deal, but former Polish premier Tusk warned it was a "make or break summit".

Cameron, under pressure from eurosceptics in his centre-right Conservative Party and a hostile right-wing press, says he will back a 'Yes' vote in a referendum expected this June if he can cut a deal in Brussels.

Failing that, he has said all options are open, refusing to rule out the possibility that Britain could become the first country to leave the EU in its more than 60-year history.

EU, Britain's fault line

A leaked draft of the summit conclusions seen on Thursday had a number of key passages in brackets, including on safeguards for non-euro Britain and on migrant benefits, meaning they have not been agreed despite weeks of tense negotiations.

Brussels has offered an "emergency brake" to limit benefits for new migrants for four years, which Britain could invoke if its welfare system is overwhelmed by the inflow of workers, as it believes it has been.

But Poland and other east European member states who have hundreds of thousands of citizens in Britain bitterly oppose such a change, saying it would discriminate against them and undermine the EU's core principle of freedom of movement.

Polish Prime Minister Beata Szydlo said on her arrival: "We want a good agreement but not at any price."

Cameron is due to meet key eastern European states after the summit dinner on Thursday, with any deal unlikely until the next and final session on Britain due on Friday morning.

He has staked his political reputation on winning the referendum in the hope of ending a feud over Britain's place in the EU that has plagued his Conservative Party for decades.

Britons voted overwhelmingly in favour of staying in the EU in a 1975 referendum, just two years after joining.

Recent opinion polls show British voters narrowly mixed on EU membership but there does seem to have been a modest increase in the 'No' camp.

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